Premium outlet malls offer a shopping resource where you can purchase products from high-end retailers at seemingly-discounted prices. Though outlet malls have a reputation for carrying last season’s styles and items that didn’t quite make the cut for retail sales, merchandise in premium outlet malls may be designed specifically for that sales channel.
Long a staple of outlet mall store shelves, overruns still find their way to premium outlet resellers. When a retailer has too much inventory, or if merchandise stays on the retailer’s shelves when the next season’s wares arrive, the retailer typically returns the unsold products to the manufacturer. Rather than destroy the products, manufacturers transfer the items to outlet malls where they get a second chance at finding a buyer. Similarly, manufacturers may have products that they have produced but cannot place with a retailer for consumer sales; this type of overrun also tends to find its way to premium outlet stores.
In some cases, a manufacturer’s product may be perfectly usable, but features some quality issue that makes it unsuitable for sale in a retail store at retail prices. Common examples of quality issues that make items unsuitable for retail stores include color bleeds, small stains, poor seams and incorrect labels. Because these products are still usable, manufacturers often choose to sell them for discounted prices at outlet stores.
Though overruns and items of sub-par quality traditionally served as the primary basis for premium outlet stock, tighter quality controls and overseas manufacturers that discard items before sending to the U.S. have reduced the volume of these products considerably. For this reason, many manufacturers produce products specifically designed for sale in premium outlet malls. These products may carry the same labels and be produced by the same company as their retail-store counterparts, but they could be somewhat different. According to Smart Money, some manufacturers change the model number or add a special designation to tags and labels for products designed specifically for outlet stores.
Though premium outlet malls are typically home to factory outlet stores, there is no formal legal definition of the term “outlet.” As a result, some premium outlet malls may contain regular retail stores selling full-priced products. In addition, merchandise produced specifically for outlet stores may not be of the same quality as retail versions of the same products. A pair of slacks designed for sale in a premium outlet mall may be made of cotton when the retail equivalent is made of wool, for example, while an outlet mall shirt may lack the reinforced buttonholes that its more expensive cousin bears. In electronics, a product designed for sale in a premium outlet mall may feature more plastic and cheaper components than the same model available from retailers.